Medicare Part D

How Income Changes Your 2026 Medicare Part B and D Costs

PITTSBURGH — As Medicare's Annual Enrollment Period runs through Dec. 7, higher-income retirees across Allegheny County are getting a fresh look at a rule that catches many people off guard: the income-related monthly adjustment amount, better known as IRMAA. For 2026, the surcharge kicks in once your income crosses $109,000 for a single filer (or $218,000 for a couple filing jointly), and it applies to both your Part B and Part D premiums.

Here's what that means for your wallet — and the mistakes to avoid.

What IRMAA actually is

IRMAA is not a separate bill or a penalty. It's an extra amount added to your standard Medicare Part B premium and your Part D drug plan premium when your income is above a set threshold.

Most people pay only the standard Part B premium. But if your modified adjusted gross income (MAGI) is above the cutoff, Social Security will add a surcharge on top. The higher your income, the higher the surcharge — it climbs in tiers.

The important thing to remember: IRMAA applies whether you're in Original Medicare or a Medicare Advantage plan, and whether your drug coverage is standalone Part D or built into an Advantage plan.

The 2027 income thresholds

Medicare uses your tax return from two years ago to decide if IRMAA applies. So your 2027 premiums are based on your 2025 tax return.

For 2026, the first surcharge tier begins at:

• More than $109,000 in MAGI for individuals
• More than $218,000 in MAGI for married couples filing jointly

From there, higher income bands trigger progressively larger add-ons for both Part B and Part D. If you file taxes as "married filing separately" and lived with your spouse during the year, the rules are stricter and the threshold is much lower. Medicare.gov publishes the full tier chart each year.

Why this matters right now in Pittsburgh

Pittsburgh is in Allegheny County, where seniors have a wide range of Medicare Advantage and Part D plans to choose from during the fall enrollment window. But choosing a plan without factoring in IRMAA is one of the more common — and expensive — planning mistakes.

Two things to keep in mind this season:

1. Switching drug plans doesn't remove IRMAA. The Part D surcharge is billed by Medicare, not by your plan. Even if you pick a different drug plan, the IRMAA add-on stays the same. 2. A one-time income spike counts. Selling a house, cashing out an IRA, or taking a large Roth conversion in 2025 could push you over the line for 2027 — even if your normal income is well below the threshold.

How you'll be notified — and how to appeal

If IRMAA applies to you, the Social Security Administration will mail a determination letter, usually late in the year. Part B IRMAA is deducted from your Social Security check (or billed directly). Part D IRMAA is billed separately, even if your drug plan premium is being paid another way.

You have the right to appeal — Social Security calls it a "request for reconsideration" — if you've had a life-changing event that dropped your income. Qualifying events include:

• Marriage, divorce, or the death of a spouse
• You or your spouse stopping work or reducing hours
• Loss of pension income
• Loss of income-producing property from a disaster

File Form SSA-44 with documentation. This is the single most overlooked step for recent retirees whose two-year-old tax return no longer reflects their real income.

Other 2027 changes worth knowing

Even if IRMAA doesn't apply to you, a few program-wide changes take effect in 2027:

• The Part D out-of-pocket cap is $2,400 — once you hit that in covered drug costs, you pay nothing more for the rest of the year.
• The Part D deductible can be no higher than $700.
• The old coverage gap ("donut hole") is gone; drug coverage now has three phases.
• The Medicare Prescription Payment Plan lets you spread your drug costs across the year in monthly payments instead of paying big amounts at the pharmacy counter. You have to opt in through your plan.

Common mistakes to avoid

• Assuming IRMAA is permanent. It's recalculated every year based on your latest tax return. If your income drops, so will your surcharge — usually two years later.
• Ignoring the appeal option. If you retired in 2025 or 2026, you may qualify to have the surcharge reconsidered now, not two years from now.
• Timing big withdrawals poorly. Talk with a tax professional before a large Roth conversion or capital gain. What saves you in taxes could cost you in Medicare premiums.
• Missing the Dec. 7 deadline. Even if you can't change IRMAA, you can still change your Advantage or Part D plan during Annual Enrollment.